Good news: Milk prices projected up, corn prices down

That’s what the U.S. Department of Agriculture has added to its estimate for Class III milk prices this year. In a report issued this morning, the USDA said Class III prices will average $16.75 to $16.95 per hundredweight this year ― up from its August estimate of $16.50 to $16.70.

The USDA also raised its estimate for the all-milk price. It now projects the all-milk price will average $17.80 to $18 per hundredweight this year ― again, extending each side of the range 25 cents from the $17.55 to $17.75 projected last month.

“Product prices are forecast higher for 2012 as the milk production forecast is reduced and demand is somewhat stronger. With higher product prices, both the Class III and Class IV price forecasts are raised,” the USDA said in its monthly “World Agricultural Supply and Demand Estimates” report. To see the full report, click here.

Meanwhile, the USDA has revised its corn price estimate downward. In August, the agency said corn would average $7.50 to $8.90 per bushel for the crop year beginning Sept. 1. Now, it says the corn price will average $7.20 to $8.60.

While that’s small consolation, since the corn price is still high by historical standards, it does mark the first time in many months that a combination of higher projected milk prices and lower projected corn prices has occurred.

The soybean price is unchanged from the August estimate of $15 to $17 per bushel.

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About the Author:

Tom Quaife, editor, Dairy Herd Management

| Tom Quaife has served as editor of Dairy Herd Management since 1992. During that time, the magazine has evolved from one that emphasized government policy and industry issues to one that has a strong business focus. Quaife believes in publishing articles that producers can act upon directly, particularly as it relates to the management of the dairy farm business. Quaife graduated from Iowa State University and his areas of expertise include health, milking equipment, dairy genetics, facilities, and milk quality. Prior to joining the Dairy Herd Management team, he spent four years as editor of Swine Practitioner and five years as an associate editor with Pork magazine. Quaife's experience in the pork industry gave him valuable insight that he applies to the dairy industry. He is located in the Lenexa, Kan., office.